Perhaps credit can be given to e-commerce sites such as Amazon or to changing consumer shopping habits, but in either case, limiting retail strategy to traditional, silo category management rules and practices no longer applies. In 2017, Wendy Liebmann, chief executive officer of WSL Strategic Retail, wrote this in her WSL Weekly Highlights publication: “Maintaining relevance today means simplifying the shopper’s trip — not by inundating them with more category choices, but by presenting disparate products as the holistic answer to an immediate need.”
In February 2016, I expressed a similar view as part of a RetailWire discussion titled, “Study urges shopper-centric category management approach.” I suggested, “The biggest shortcoming of current category management processes is that they remain based on a market mentality from the ’90s.”
Additionally, I commented, “The dynamics of today’s market are vastly different than they once were. And using the same approach that once was based on category definitions largely determined by retailers and manufacturers no longer applies. The consumer is in charge. And unless the process is reinvented to put a spotlight on ‘need states,’ ‘convenience’ and ‘solutions,’ I fear that many will keep doing what they’ve always done, anticipating different (and relevant) results.”
This is especially true in the area of health care and condition management. Patients managing a chronic condition or caring for a loved one are increasingly seeking solutions to real problems and challenges without relying solely on guidance from their physician.
A retail-based service poised to help consumers manage their own health first appeared in 2013 as retail clinic operations began to expand services to include treatment and management of selected chronic conditions. In 2015, a Deloitte Survey of U.S. health care consumers found that only 11% of retail clinic users had visited one for management of a chronic condition. However, nearly seven in 10 consumers with chronic conditions were interested in using retail for chronic care. The emergence of telemedicine and potential in-store solutions may also bring additional value to a traditional retail setting.
There has been much discussion about “frictionless retail” and the desire to produce seamless shopping experiences across mobile, e-commerce and traditional brick-and-mortar. But what about reducing friction within the retail operation itself? The self-reliant shopper is looking for holistic solutions within the aisles of the traditional retail setting to manage conditions. Recognizing that shoppers are not defined by the types of products they purchase to meet their needs, retailers have to create better cooperation across their operation and rethink their organizational structures that put firewalls between departments (e.g., produce versus pharmacy versus general merchandise, etc.).
Both inventory management and the customer experience are ongoing concerns for many retailers as they strive to improve the flow of information across departments. Looking at an operation holistically to meet the full complement of a consumer’s needs is more critical than ever for accurate planning, store design, and in-store messaging. Understanding the shopper’s desired market basket from the outside in is a strategy that can be used to inform the retailer’s decisions.
For instance, a patient struggling with arthritis may begin her journey in the pharmacy and health care sections, shop housewares for a softer-handled cooking utensil to ease her discomfort, pick up fish rich in omega-3 fatty acids, broccoli and walnuts (all of which may reduce inflammation), and finally add a hand exercise ball because her online community told her it could offer some relief.
How does a retailer peer inside this basket and then make shopping easier for this consumer — or any other shopper managing a chronic condition? The data exists … it’s time to turn store design on its nose.
Dave Wendland is vice president of strategic relations and co-owner of Hamacher Resource Group (HRG), a company focused on improving results across the retail supply chain located near Milwaukee. He participates in business development, product innovation and marketing communications activities for the company.